CJEU, 7th chamber, December 19, 2019, No C-590/18 P

THE COURT (Seventh Chamber),

1 By its appeal, Fujikura Ltd seeks to have set aside in part the judgment of the General Court of the European Union of 12 July 2018, Fujikura v Commission (T 451/14, not published, EU:T:2018:452) ('the judgment under appeal'), by which the General Court dismissed its action for the annulment in part of Commission Decision C(2014) 2139 final of 2 April 2014 relating to a proceeding under Article 101 [TFEU] and Article 53 of the EEA Agreement (Case AT.39610 - Power cables) ('the contested decision') in so far as it concerns the appellant and its application for a reduction in the amount of the fine imposed by that decision.

Legal context

Regulation (EC) No 1/2003

2 Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 and 102 TFEU] (OJ 2003 L 1, p. 1) provides as follows, in Article 23(2) and (3) thereof:

'2. The Commission may by decision impose fines on undertakings and associations of undertakings where, either intentionally or negligently:

(a) they infringe Article [101 or 102 TFEU] ...

...

3. In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.'

The 2006 Guidelines

3 The Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (OJ 2006 C 210, p. 2) ('the 2006 Guidelines') state, in points 2 and 4 thereof, that, so far as concerns the setting of fines, 'the Commission must have regard both to the gravity and to the duration of the infringement' and that 'fines should have a sufficiently deterrent effect'.

4 It is apparent from points 9 to 11 of those guidelines that, without prejudice to point 37 thereof, the method used by the European Commission when setting fines has two steps to it, namely, first, the determination of a basic amount and, secondly, potential adjustments of that amount upwards or downwards. In the determination of the basic amount of the fine, the Commission first, in accordance with points 13 to 18 of those guidelines, determines the value of the sales to be taken into account. Pursuant to point 19 of those guidelines, the basic amount of the fine is related to a proportion of the value of those sales, depending on the degree of gravity of the infringement, multiplied by the number of years of infringement. In addition, under point 25 of the 2006 Guidelines, the Commission may include in the basic amount a sum known as the 'entry fee', in order to deter undertakings from participating in infringements of EU competition law.

5 Point 13 of the 2006 Guidelines is worded as follows:

'In determining the basic amount of the fine to be imposed, the Commission will take the value of the undertaking's sales of goods or services to which the infringement directly or indirectly ... relates in the relevant geographic area within the [European Economic Area (EEA)]. It will normally take the sales made by the undertaking during the last full business year of its participation in the infringement ...'

6 Point 18 of those guidelines states:

'Where the geographic scope of an infringement extends beyond the EEA (e.g. worldwide cartels), the relevant sales of the undertakings within the EEA may not properly reflect the weight of each undertaking in the infringement. This may be the case in particular with worldwide market-sharing arrangements.

In such circumstances, in order to reflect both the aggregate size of the relevant sales within the EEA and the relative weight of each undertaking in the infringement, the Commission may assess the total value of the sales of goods or services to which the infringement relates in the relevant geographic area (wider than the EEA), may determine the share of the sales of each undertaking party to the infringement on that market and may apply this share to the aggregate sales within the EEA of the undertakings concerned. The result will be taken as the value of sales for the purpose of setting the basic amount of the fine.'

7 Under point 37 of the Guidelines:

'Although these Guidelines present the general methodology for the setting of fines, the particularities of a given case or the need to achieve deterrence in a particular case may justify departing from such methodology or from the limits specified in point 21.'

Background to the dispute and the contested decision

8 The background to the dispute, as set out in paragraphs 1 to 21 of the judgment under appeal, may, for the purposes of the present proceedings, be summarised as follows.

9 The appellant, Fujikura, is a Japanese company active in the underground and submarine power cable production and sales sector. With effect from 1 October 2001, it transferred part of its activities in the power cable sector to a joint venture named Viscas Corp., which it owned in equal shares with another Japanese company in the same sector, Furukawa Electric Co. Ltd ('Furukawa').

10 In Article 1 of the contested decision, the Commission found that the appellant and 25 other companies, including Furukawa and Viscas, had participated in a cartel ('the cartel'), constituting a single and continuous infringement of Article 101 TFEU and Article 53 of the EEA Agreement in the (extra) high voltage underground and/or submarine power cables sector ('the infringement at issue').

11 According to the contested decision, the cartel took the form of a composite whole composed of two main configurations, namely

- a configuration which included the European undertakings, generally referred to as the 'R' members, the Japanese undertakings, referred to as the 'A' members, and lastly the South Korean undertakings, referred to as the 'K' members and which made it possible to achieve the objective of allocating territories and customers among the European, Japanese and South Korean producers ('the A/R configuration'). That allocation followed an agreement relating to the 'home territory', under which the Japanese and South Korean producers would refrain from competing for projects in the European producers' 'home territory' and the European producers would undertake to stay out of the Japanese and South Korean markets. In addition, the parties allocated projects in the 'export territories', namely the rest of the world with the notable exception of the United States;

- a configuration which involved the allocation of territories and customers by the European producers for projects to be implemented within the European 'home' territory or allocated to the European producers ('the European configuration').

12 According to the contested decision, the appellant participated in the cartel from 18 February 1999 to 28 January 2009, initially directly, during the period from 18 February 1999 to 30 September 2001, and secondly indirectly, during the period from 1 October 2001 to 28 January 2009, through Viscas, over which it exercised a decisive influence.

13 Having regard to the role played by the various participants in the cartel in its implementation, the Commission classified them into three groups, namely, first, the undertakings which formed the core group of the cartel, secondly, the undertakings which were not part of the core group of the cartel but which nevertheless could not be regarded as fringe players in it and, thirdly, the fringe players in the cartel. According to the Commission, the appellant belonged to the first of those groups.

14 For the purposes of calculating the amount of the fines, the Commission applied the methodology set out in the 2006 Guidelines.

15 In the first place, as regards the basic amount of the fines, the Commission established the value of sales using the method provided for in point 18 of those guidelines. It then selected the proportion of the value of sales which would reflect the gravity of the infringement at issue. In that regard, the Commission considered that that infringement by its nature constituted one of the most harmful restrictions of competition, which justified a 'gravity percentage' of 15%. The Commission also increased the gravity multiplier by 2% for all addressees of the contested decision on account of their combined market share and the almost worldwide reach of the cartel, which included, inter alia, all of the EEA. The Commission also considered that the conduct of the European undertakings had been more detrimental to competition than that of the other undertakings, inasmuch as, in addition to their participation in the A/R configuration, the European undertakings had shared power cable projects among themselves in the context of the European configuration. For that reason, the Commission set the proportion of the value of sales to reflect the gravity of the infringement at 19% for the European undertakings and at 17% for the other undertakings.

16 The basic amount of the fine as thus established was, after inclusion of a sum known as the 'entry fee' corresponding to 17% of the value of those sales, EUR 8 152 000 for the appellant. The basic amount of the fine for Viscas came to EUR 34 992 000.

17 In the second place, as regards adjustments to the basic amount of the fines, the Commission found there neither to be any aggravating circumstances nor any mitigating circumstances so far as the appellant and Viscas were concerned.

18 Under Article 2(o) and (p) of the contested decision, the Commission imposed on the appellant a fine of EUR 8 152 000, in respect of its direct participation in the cartel at issue during the period from 18 February 1999 to 30 September 2001, and on Viscas a fine of EUR 34 992 000 in respect of its participation in the cartel at issue during the period from 1 October 2001 to 28 January 2009, jointly and severally with the appellant and with Furukawa.

The procedure before the General Court and the judgment under appeal

19 By application lodged at the Registry of the General Court on 16 June 2014, the appellant brought an action for partial annulment of the contested decision in so far as the decision concerns it and for reduction of the fine imposed on it.

20 In support of its claim seeking reduction of the fine imposed on it, the appellant raised before the General Court two pleas in law, the second plea in law alleging an infringement of the principles of proportionality and equal treatment.

21 By order of 25 June 2015, the General Court accepted Viscas's application for leave to intervene in the proceedings in support of the form of order sought by the appellant.

22 By the judgment under appeal, the General Court dismissed the action in its entirety.

23 As regards the alleged infringement of the principle of equal treatment, in paragraph 125 of the judgment under appeal the General Court held that the appellant's argument that the application by the Commission of the method of calculating fines laid down, not in point 13 of the 2006 Guidelines, but in point 18 thereof, favoured the European producers, was incorrect since, having regard to the nature of the infringement at issue, which consisted inter alia in restricting access by the Japanese producers to the EEA market, the share of sales actually made by the European producers in the EEA could not be used as the basis for assessing their weight in the cartel. The use of the share of sales actually made by the European producers in the EEA would have led, in the present case, to their weight in the cartel being overvalued and their being penalised in excess of their participation in that cartel. According to the General Court, it could not therefore be held that the difference between the amount of the sales actually made by the European producers in the EEA and that allocated to them pursuant to point 18 of those guidelines demonstrated an advantage conferred on them by the Commission.

Forms of order sought by the parties before the Court of Justice

24 By its appeal, the appellant claims that the Court should:

- set aside the judgment under appeal in so far as it rejected the plea in law alleging an infringement of the principles of proportionality and equal treatment with regard to the fine imposed upon it;

- annul Article 2(o) of the contested decision imposing a fine of EUR 8 152 000 on it;

- reduce the fine imposed on it by 44% to EUR 4 565 120, and

- order the Commission to pay the costs.

25 The Commission contends that the Court should:

- dismiss the appeal and

- order the appellant to pay the costs.

26 Viscas claims that the Court should:

- allow the appellant's appeal and

- order the Commission to pay the costs incurred by Viscas in connection with the present appeal and with the action before the General Court.

The appeal

27 In support of its appeal, the appellant puts forward a single ground, alleging that in the judgment under appeal the General Court infringed the principle of equal treatment by confirming, in paragraph 125 of the judgment under appeal, the merits of the Commission's decision to apply the method provided for in point 18 of the 2006 Guidelines in the present case without giving sufficient weight to the fact that the European producers participated both in the European configuration and in the A/R configuration.

28 At the hearing, and in response to a question put by the Court of Justice on that point, the appellant stated that the purpose of the reference in its appeal to the principle of proportionality was simply to draw attention to the way in which the principle of equal treatment was to be applied in the present case, namely that the fines had to be calculated in a manner enabling the relative role played in the cartel by, on one hand, the European producers, and, on the other hand, the Japanese and South Korean producers, to be reflected.

Arguments of the parties

29 The appellant, supported by Viscas, submits that the Commission's decision to apply the method for calculating fines provided for in point 18 of the 2006 Guidelines without distinction to all the participants in the infringement at issue, as if the cartel covered only the A/R configuration, resulted in basic amounts of the fines which significantly undervalued the role of the European producers in that infringement and, consequently, significantly overvalued the role of the Japanese and South Korean producers, including that of the appellant.

30 While not challenging the Commission's decision to apply the method provided for in point 18 of the 2006 Guidelines in the present case, the appellant claims that a correct application of that method presupposes that the fictive sales upheld, which are used to determine the basic amounts of the fines, must reasonably reflect the contribution of each participant to the cartel as a whole. It argues that it is necessary in this connection to take into consideration both the A/R configuration and the European configuration.

31 The appellant submits that it is apparent from the case-law of the Court of Justice that the purpose of point 18 of the 2006 Guidelines is to determine fictive sales values in such a way that these reasonably reflect the weight or contribution of the various participants in a cartel caught under Article 101 TFEU. As a result, any application of that method which omits the contribution of some of those participants to the infringement as a whole fails to achieve that objective and leads to erroneous results. It follows that the application of the method provided for in point 18 of the 2006 Guidelines in the present case should be adapted in such a way as to restore equal treatment between the European producers and the Japanese and South Korean producers.

32 Consequently, the Court should reduce the amount of the fine imposed on the appellant by applying a reduction that is proportionate to the benefit enjoyed by the European producers due to the fact that the fines imposed on them were lower than those which would have been imposed on them for their participation in the European configuration if participation in that configuration had been penalised separately by the Commission. In that case, that institution would have applied the method provided for in point 13 of the 2006 Guidelines. By contrast, the approach followed by the Commission in the present case had the result that the European producers were proportionately less penalised than the Japanese and South Korean producers. Thus, the appellant's fine should be reduced by 44%, that percentage representing the difference between, on the one hand, the actual sales of European producers in the EEA which would have been taken into account under the method provided for in point 13 of the 2006 Guidelines and, on the other hand, the sales in fact taken into account by the Commission under the method provided for in point 18 of those guidelines. According to the appellant, the adjustment it suggests is fundamentally similar to the one applied by the Court of Justice in its judgment of 12 November 2014, Guardian Industries et Guardian Europe v Commission (C 580/12 P, EU:C:2014:2363).

33 The Commission submits that the ground put forward by the appellant is ineffective, inter alia on account of the fact that the appellant has not challenged the grounds of the judgment under appeal concerning the interwoven nature of the two cartel configurations, which demonstrate that the appellant was in the same position as the other members of the cartel. In any event, it submits, that ground of appeal is unfounded.

Findings of the Court

34 So far as concerns the issue of whether the single plea is ineffective, as the Commission submits it to be, the argument which the Commission derives from the fact that the appellant has not challenged the findings made by the General Court in paragraphs 121, 136 and 140 of the judgment under appeal cannot succeed.

35 In paragraph 121 of the judgment under appeal, the General Court merely found that, in respect of a market-sharing agreement between undertakings competing at a worldwide level, the worldwide market shares give the best adapted representation of the capacity of those undertakings to cause significant damage to other operators in the European market and give an indication of their contribution to the effectiveness of the cartel as a whole or, conversely, of the instability which would have affected the cartel had they not participated. However, in that paragraph of the judgment under appeal, the General Court did not examine whether that consideration also applied where, as in the present case, the cartel contained not only a market-sharing agreement under which only European producers could operate in the EEA market, but also an agreement whereby those European producers allocated that market between themselves.

36 Admittedly, in paragraph 136 of the judgment under appeal, the General Court held that the appellant had failed to show that compliance with the 'home territory' agreement by the Japanese and South Korean producers, that is to say the agreement of those latter producers not to enter the EEA market, was not a condition for the effectiveness of the European configuration and, in paragraph 140 of the judgment under appeal, held that the appellant had not disputed the evidence on which the Commission had based its finding that 'the [European configuration] was subordinate to the [A/R configuration] and gave effect to it'. However, those findings do not show that the General Court considered the appellant's situation to be identical to that of the European producers so far as concerns their respective participations in the infringement at issue.

37 Moreover, it must be stated that, contrary to what was submitted by the Commission, the fact that the appellant participated in the same single and complex infringement as the European producers and that it knew of the European configuration does not necessarily mean that it was in the same situation as the European producers. As it was observed in paragraph 15 above, it is apparent from the contested decision that the Commission itself distinguished between the situation of the Japanese and South Korean producers and that of the European producers so far as concerns the respective gravity of their participation in the infringement at issue.

38 It follows that, contrary to what is contended by the Commission, were the appellant's single plea to be declared well-founded, it would be such as to lead to the setting aside of the judgment under appeal.

39 As to the substance, it must be recalled that the principle of equal treatment is a general principle of EU law, enshrined in Articles 20 and 21 of the Charter of Fundamental Rights of the European Union. According to settled case-law of the Court of Justice, that principle requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (see, inter alia, judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission, C 580/12 P, EU:C:2014:2363, paragraph 51).

40 In the present case, it is apparent from the appellant's pleadings that it takes the view that, by calculating the basic amounts of all the fines imposed in the contested decision on the basis of the method provided for in point 18 of the 2006 Guidelines, the Commission treated different situations in the same way, without the uniform nature of that treatment being objectively justified.

41 It is therefore necessary to examine, in the first place, whether the appellant and the other Japanese and South Korean participants in the cartel were in a situation different to that of the European producers.

42 That was indeed the case.

43 As the General Court held in paragraph 18 of the judgment under appeal, the Commission found in recitals 997 to 1010 of the contested decision that the conduct of the European undertakings had been more detrimental to free competition than that of the other undertakings inasmuch as, in addition to their participation in the A/R configuration, the European undertakings had shared power cable projects among themselves in the EEA in the context of the European configuration. More specifically, in recital 999 of the contested decision, the Commission found that the latter '[had been] carried out exclusively by the European producers'. It follows that the Commission itself took the view that there was a difference between, on the one hand, the situation of the appellant and the other Japanese and South Korean participants in the A/R configuration and, on the other hand, that of the European producers which participated both in that configuration and in the European configuration.

44 That consideration is not affected by the fact that recital 999 of the contested decision is in the section of that decision dedicated to the examination of the gravity of the conduct of the undertakings at issue, given that it is apparent from that section that, to justify the application to the European producers of a gravity multiplier increased by two percentage points, the Commission relied on a difference between the situation of the latter and that of the Japanese and South Korean participants in the cartel. Nor is that consideration called into question by the Commission's argument that, by guaranteeing that it would stay out of the European market, the appellant was a silent but necessary partner of the European producers in the more specific European market-sharing agreements, given that the contested decision does not show that, in the present case, the Commission relied on such a consideration to justify its approach as regards the calculation of the fines to be imposed on the participants in the cartel.

45 It follows that the appellant was not in the same situation as the European producers as regards its participation in the infringement at issue.

46 However, contrary to what is argued by the appellant, it cannot be held that the General Court erred in law in finding that the Commission had not infringed the principle of equal treatment solely on account of the fact that it had applied the method provided for in point 18 of the 2006 Guidelines in order to calculate the fines for all the participants in the cartel.

47 Since the infringement at issue was a single infringement, committed in the context of a single cartel, which the appellant does not dispute, it was for the Commission to calculate the fines appropriate for penalising that infringement, and not fines aimed at one or the other of the configurations of that cartel. As the General Court correctly pointed out in paragraph 125 of the judgment under appeal, the application of the method provided for in point 13 of the 2006 Guidelines to the present case would have led to the weight of the European producers in the cartel being overvalued and to their being penalised in excess of their participation in that cartel, inasmuch as that cartel also included a configuration which extended beyond the EEA, namely the A/R configuration. The application of the method provided for in point 13 of the 2006 Guidelines to all the participants in the cartel would have had the consequence that no fines or only minimal fines would have been imposed on the Japanese and South Korean participants in the A/R configuration.

48 Admittedly, in addition to the A/R configuration, whose geographical scope extended beyond the EEA and for which both the European producers and the Japanese and South Korean producers were held liable in the contested decision, the cartel included the European configuration, which covered in particular the territory of the EEA and which, according to the contested decision, had been carried out exclusively by the European producers.

49 However, although the application of the method provided for in point 18 of the 2006 Guidelines did not allow the Commission to take into account the respective weight in the cartel of the European producers, on the one hand, and the Japanese and South Korean producers, on the other hand, there was nothing to prevent the Commission, with a view to ensuring compliance with the principle of equal treatment, from taking this into account at another stage in calculating the fine, in particular when adjusting the basic amount in the light of aggravating and mitigating circumstances, or when determining the proportion of the value of sales used to calculate the basic amount of the fine (see, to that effect, judgment of 26 January 2017, ZucchettiRubinetteria v Commission, C 618/13 P, EU:C:2017:48, paragraph 56). It follows that differences in situation as regards the participation of an undertaking in an infringement of EU competition law may be taken into consideration at various stages in the calculation of the fine, and not necessarily solely at the stage of determining the value of sales.

50 In this connection, in the contested decision the gravity multiplier applied by the Commission to the European producers was increased by two percentage points in relation to that upheld by that institution in respect of the Japanese and South Korean producers. Accordingly, the Commission did not treat the appellant in the same way as the European producers as regards setting the fines. It is true that the appellant argued at the hearing that that increase in the gravity multiplier applied to the European producers reduced only marginally the substantial advantage which was allegedly granted to them in the present case. However, that argument is based on the erroneous premiss, as is apparent from paragraph 47 above, that the alleged preferential treatment given to the European producers in the present case should be determined in the light of the hypothetical fines which would have been imposed on them under a calculation based on the method provided for in point 13 of the 2006 Guidelines.

51 That consideration is not called into question by the case-law established by the judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission (C 580/12 P, EU:C:2014:2363), cited by the appellant. In the case which gave rise to that judgment, the Commission had calculated the basic amounts of the fines on the basis of the method provided for in point 13 of the 2006 Guidelines. As the Court subsequently held, the judgment under appeal in that case was vitiated by an error of law inasmuch as the General Court had decided that the Commission was correct to have excluded from that calculation the sales made to entities belonging to the same undertaking, thereby misapplying the method that that institution had itself chosen in order to determine the amount of the fine (see, to that effect, judgment of 14 September 2017, LG Electronics and Koninklijke Philips Electronics v Commission, C 588/15 P and C 622/15 P, EU:C:2017:679, paragraph 95). In the present case, by contrast, the appellant does not allege that the Commission misapplied the method provided for in point 18 of the 2006 Guidelines, but that it erred in applying that method in the same way to all the undertakings which participated in the cartel. It follows that, contrary to what the appellant submits, its objections against the Commission in support of the present appeal are not similar to those which gave rise to the judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission (C 580/12 P, EU:C:2014:2363).

52 The single ground of appeal must therefore be rejected and, consequently, the appeal in its entirety must be dismissed.

Costs

53 Under Article 138(1) of the Rules of Procedure, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings.

54 Since the appellant has been unsuccessful and the Commission has applied for it to pay the costs, the appellant must be ordered, in addition to bearing its own costs, to pay those incurred by the Commission.

55 Under Article 184(4) of the Rules of Procedure, where the appeal has not been brought by an intervener at first instance, he may not be ordered to pay costs in the appeal proceedings unless he participated in the written or oral part of the proceedings before the Court. Where an intervener at first instance takes part in the proceedings, the Court may decide that he shall bear his own costs.

56 Since Viscas participated in the proceedings before the Court, it must be held, in the circumstances of the case, that it is to bear its own costs.

On those grounds, the Court (Seventh Chamber) hereby:

1. Dismisses the appeal;

2. Declares that Fujikura Ltd is to bear its own costs and orders it to pay those incurred by the European Commission;

3. Declares that Viscas Corp. is to bear its own costs.